1. Miller Brothers Hardware paid an annual dividend of $1.15 per share last month. Today, the company announced that future dividends will be increasing by 2.6 percent annually. If you require a 12 percent rate of return, how much are you willing to pay to purchase one share of this stock today?
A) $12.23
B) $12.55
C) $12.67
D) $12.67
2. Net income = $100,000, Depreciation expense = $10,000, Net increase in accounts receivable = $5,000, Net increase in accounts payable = $3,000. On the basis of the information provided in the table above for a corporation, the corporation's net cash flow from operating activities for the current year is:
A) $98,000
B) $102,000
C) $108,000
D) $118,000
3. The common stock of Textile Mills pays an annual dividend of $1.65 a share. The company has promised to maintain a constant dividend even though economic times are tough. How much are you willing to pay for one share of this stock if you want to earn a 12 percent annual return?
A) $13.75
B) $14.01
C) $14.56
D) $14.79
E) $15.23
4. A company is considering producing a product for a new market. The fixed costs required for manufacturing and delivering the product is $50,000. Labor and material costs are estimated to be approximately $25.00 per product. If the product is sold for $35.00 each, the firm's break-even volume would be:
A) 50,000 units
B) 5,000 units
C) 2,500 units
D) 500 units
5. A company had sales of $920,000 and fixed costs were $160,000. What was the income from operations if the contribution margin ratio was 30 percent?
A) $116,000
B) $276,000
C) $484,000
D) $644,000
6. Routine physical examinations are conducted annually as part of a health service program for the employees. It was discovered that 8% of the employees needed corrective shoes, 15% needed major dental work and 3% needed both corrective shoes and major dental work. What is the probability that an employee selected at random will need either corrective shoes or major dental work.
A) 0.20
B) 0.25
C) 0.50
D) 1.00
E) None of the above
7. Sessler Manufacturers made two announcements concerning its common stock today. First, the company announced that the next annual dividend will be $1.75 a share. Secondly, all dividends after that will decrease by 1.5 percent annually. What is the maximum amount you should pay to purchase a share of this stock today if you require a 14 percent rate of return?
A) $11.29
B) $12.64
C) $13.27
D) $14.00
E) $14.21
8. Kershaw Bookstore had 500 units on hand at January 1, costing $18 each. Purchases and sales during the month of January were as follows:
Date____Purchases____Sales
Jan 14___________375@$28
Jan 17__250 @ $20__
Jan 25__250 @ $22__
Jan 29___________250 @ $32
Kershaw does not maintain perpetual inventory records According to a physical count, 375 units were on hand at JAnuary 31.
The cost of the inventory at January 31, under the LIFO method is:
A) $1,000
B) $6,750
C) $7,750
D) $8,000
9. A company issues a $600,000, 12 percent, 90-day note payable to acquire an offic ebuilding. What is the maturity value of the note?
A) $72,000
B) $600,000
C) $618,000
D) $672,000
10. What is the median of 26, 30, 24, 32, 32, 31, 27, and 29?
A) 32
B) 29
C) 30
D) 29.5
E) 30.5